Is the industry fucked or is it just the case that it is a winner take-all situation? I assume that the big games like COD , Halo etc are still making plenty of cash. Maybe rather than seeking a profit on each game you just try to keep the lights on with the bonus of a lottery ticket that the game might make it huge.

For every big AAA developer going bust there are probably 100 indie devs who fail to gain traction and just slide into obscurity.